As most of us know, last Friday the US congress passed the Paycheck Protection Program and the EIDL (Economic Injury Disaster Loan Emergency Advance) to help small business retain their employees and to stay in business. As I record this podcast the SBA is also presenting SBA Express Bridge Loans and an SBA Debt Relief offering as funding options associated with the COVID-19 outbreak. I strongly recommend you visit SBA.gov for yourself to learn more. I also recommend you speak with your company’s accountant determine the best path for your business. Today, the Federal Reserve also just announced an additional $2.3 TRILLION in loans which includes… 

With all of the fluidity going on in the market, Here are 10 Do’s and Don’t’s related to seeking financial assistance from the government…

1. Don’t hesitate to apply for the PPP. The only businesses that shouldn’t apply are those that haven’t been impacted by COVID-19. 

2. Do move fast. There are 5 million employer companies in the U.S. that are going to be vying for this pot of money [through the PPP!  So, don’t just make sure you have your ducks in a row in terms of documentation. Make sure you file your application from the moment that your bank window opens.”

3. Don’t worry about loan forgiveness right now. Instead, take advantage of the opportunities afforded by the PPP. This is very cheap, 2-year money. There is no collateral. And there are no personal guarantees. This will probably never happen again in your lifetime. 

4. Do apply for the EIDL Program in addition to PPP. You can always turn down the money if you don’t need it or find it’s not beneficial to you. 

5. Don’t expect your loan to arrive swiftly. In the case of EIDL, the government has promised to deliver the first $10,000 to businesses within three days of applying. However, the remaining funds are likely to take much longer.

When Hurricane Katrina hit, it took businesses 4 to 5 months to get these funds. Prepare, and understand that when you’re dealing with the government, you’re dealing with a different and slower timeline!

6. Do explore additional funding through state programs. For example, in New Jersey, businesses can take advantage of $5,000 and $10,000 grants. 

7. Don’t take out a loan through a credit card. Although credit cards can deliver funds within 24-48 hours, many loans have terrible terms, such as 300% interest rates. Talk to your financial advisor before you accept any money that isn’t offered through a bank.

8. Do scrutinize your cash flow. This will help you determine if you should explore the SBA 7(a) Loan Program in addition to the PPP or EIDL program!

9. Don’t make big decisions until you see the big picture. I’d hope that none of us would be making any drastic decisions right now around things like layoffs or furloughs until we have a clear picture of this relief and how it applies to you. 

10. Do what’s right by your employees. I remind everyone we’re all under stress, and our employees are under tremendous stress.". Make sure you take care of them. Make sure that you are using this stimulus to share some good news and try to inspire some confidence in your workforce